Expropriation and the obligation to tolerate are essential instruments within spatial and environmental policy in the Netherlands, enabling societal and infrastructural projects that might otherwise be hindered by objections from landowners or local residents. The constitutional basis for expropriation is found in Article 14 of the Dutch Constitution, further developed in the Expropriation Act and the Environmental Impact Assessment Decree, while the obligation to tolerate arises from specific provisions in zoning plans and environmental permits (such as the Dutch General Provisions for Environmental Law). However, when the institutions involved in these processes—ranging from municipalities and water boards to project and energy companies—or their managers and regulators, are accused of financial mismanagement, fraud, bribery, money laundering, corruption, or violations of international sanctions, it directly undermines legal certainty and the progress of projects. Delays in infrastructural works, remediation operations, or industrial zones not only have economic consequences but also ecological ones, as contaminated sites remain unaddressed longer and critical investments stagnate.
Financial Mismanagement in Expropriation and Obligation to Tolerate
In expropriation procedures, an accurate property valuation is crucial to ensure fair compensation and to cover fines or remediation obligations for environmental contamination. Financial mismanagement can manifest in outdated appraisal reports, insufficient budgeting for legal procedures, or miscalculations of remediation costs. Municipalities or national services that consistently underestimate their budgets for legal fees and soil investigations may face unexpected invoices during large objection and appeal procedures. This leads to unforeseen delays in the expropriation process, slowing down utilities and railway projects, while vulnerable nature reserves are exposed to environmental pressure for longer periods. Investors and contractors demand additional bank guarantees and risk premiums in such situations, causing total project costs to rise exponentially and putting societal support under strain.
Fraud in Valuations and Toleration Agreements
Fraud in expropriation and toleration procedures primarily occurs through manipulation of cadastral data and falsification of environmental and soil reports. A valuation agency that, in collaboration with a civil servant, artificially lowers the market value of land to reduce expropriation compensation, or a consultancy firm that underreports contamination levels to minimize remediation compensation, undermines the legal protection of landowners. Once such fraudulent practices come to light, reopened cases, new lawsuits, and the revocation of toleration decisions often follow. This triggers a cascade of damage claims and expropriation procedures are restarted, leading to additional costs for public funds and protracted litigation.
Bribery in Tolerating and Expropriating
Bribery takes various forms in this domain: a civil servant receiving extra “consultancy fees” under the table in exchange for issuing or softening a toleration order, or an estate agent binding developers to bribery schemes to acquire expropriated lands at an artificially low price. Such transactions not only lead to criminal investigations but also irreparably invalidate both expropriation decisions and toleration agreements. The administrative court may decide to annul everything, forcing executing agencies to start over with surveying, negotiations, and compensation, resulting in delays of years and undermining both public and private investments.
Money Laundering Through Land Transactions
Money laundering schemes often manifest in the continuous buying and selling of land prior to expropriation procedures. Criminal groups establish shadow companies to acquire land through complex structures, with the ‘legal’ exploitation serving as a front for money laundering. Missing due diligence at municipalities or corroded notarial chains can facilitate this. When the FIOD (Fiscal Information and Investigation Service) or financial regulators detect suspicious transactions, ongoing expropriation and toleration procedures are frozen, meaning projects grind to a halt while judicial investigations extend over several years. The initial objectives—such as expanding nature reserves or constructing high-voltage lines—are thus severely jeopardized.
Corruption and Conflict of Interest
Corruption in the context of expropriation and the obligation to tolerate goes beyond occasional bribery and signals a culture of mutual favors and political cronyism. This may manifest as continuously purchased political support for zoning changes or systematically favoring certain developers through preferential policies. In such a system, independent oversight is absent: internal audits are ignored, reports of conflicts of interest go unanswered, and council members vote against their own rules. When such practices become public, it results in not only significant political disdain and motions of no confidence, but the Minister of the Interior may intervene and activate Article 46 of the Dutch Constitution, which means that expropriations and hardened toleration decisions are taken over by a national committee, complicating the process further.
Violation of International Sanctions
Although expropriation and the obligation to tolerate are generally national matters, international sanctions can come into play when foreign parties or sanctioned entities are involved in land development, for example, for offshore wind farms or transnational transport corridors. Granting usage rights or enforcing toleration orders on sanctioned companies can lead to immediate blockage of EU subsidies, fines under the Sanctions Act, and the freezing of contracts by the EU. Such sanction violations not only endanger strategic energy and infrastructure projects but also damage the reputation of the Netherlands as a reliable location for international investment, making future partnerships and credit facilities inaccessible.
